Tsingshan sold 200,000 ton March 2023 contracts at price of $20 per kilo. The Initial Margin was $20,000 per contract.(see Article 2). On March 8,2022 price of Nickel went suddenly up $100 per kilogram . Q. 3.1 What is the margin call to Tsingshan ? Will there be any damage to Tsingshan's booking broker if Tsingshan cannot pay the margin call Q. 3.2( A made-up story- see more in Article 2) Data: XYZ shorts 200,000 Ton of Nickel on March 1 at $20,000 per ton Below are Nickel prices for 2/22; and 3/1/223/9/22 r 10 Calculate the margin calls on every day between March 2 through March 7 and sum them up. By end of March 8 trading a new margin call arrives(How much?) and XYZ cannot meet it- its position is liquidated at $100,000 per ton and company is destroyed, although it would be viable if it could survive till March 9. How can it be? Q. 3.3 (this question is optional) Use data from Q. 3.2 to explain the situation Tsingshan was involved in. Why "LME brokers that had serviced Tsingshan, LME decided to cancel all that day's trading, more than 9,000 trades worth about $4 billion. It. Canceled. The. Trades" (quote from Article 2) WSJ March 8, 2022 By Jing Yang_Chinese Nickel Giant Tsingshan Faces \$8 Billion Trading Loss as Ukraine War Upends Market Chinese nickel titan Tsingshan Holding Group faces billions of dollars in trading losses, people familiar with the company said, after Russia's war in Ukraine set off an unprecedented rise in the price of a key metal used in stainless steel and electric-vehicle batteries. The paper loss stood at $8 billion on Monday, before violent moves in nickel prices led the London Metal Exchange to suspend trading in the metal on Tuesday, one of the people said. Late Tuesday, the exchange said it anticipates trading won't resume before Friday. Tsingshan's founder, Xiang Guangda, told a Chinese media outlet that "there have been some moves by foreigners," and that it is in active negotiations with relevant parties, without specifying who they were and what was being negotiated. Some of Tsingshan's creditor banks in China have become concerned about the effect of the company's trading losses on its balance sheet, according to the people familiar with the company. Tsingshan... had a $19 billion in revenue last year. For years, Tsingshan routinely sold nickel using forward contracts as part of its regular hedging, according to the people familiar with the company. Nickel prices usually move a couple of percent a day. They surged 66% Monday (March 8 ) and then on Tuesday, the price briefly doubled. They rushed to close out losing positions by buying back nickel contracts. [BUT]... Hardly anyone would sell to them, the traders said, so the purchases led to a huge rise in prices in a self-reinforcing dynamic known as a short squeeze. The crescendo arrived early Tuesday, when the price of nickel on the London Metal Exchange hit a record high of over $100,000 a metric ton before pulling back somewhat. March 9, 2022 Bloomberg reports another headache for Tsingshan as it attempts to exit its position is the fact that the company's output does not match the grade of nickel used in settlement on the LME, the contracts aren't a perfect hedge. Tsingshan has been behind some of the metal's biggest swings in recent years, March 9, 2022, 10:23 AM Bloomberg Shanghai Nickel Drops by Daily Limit as Some Trading Resumes (Bloomberg) -- Some Shanghai Futures Exchange nickel contracts dropped by the daily limit as trading partially resumed on the Chinese bourse, in a sign that an extreme short squeeze that's driven global prices sharply higher may be starting to ease. Five contracts for delivery between March and February next year all slumped as the bourse's evening session got underway, with four falling by the daily limit. About half of the exchange's contracts remained suspended following limit-up gains. Tsingshan Holding Group Co, the Chinese nickel company at the center of the historic short squeeze has secured a package of loans from local and international banks to help it meet a wave of margin calls, Bloomberg reported earlier. The problems started on Tuesday morning, when traders on the London Metal Exchange smelled blood and nickel prices almost doubled. China's Tsingshan Holding faced a \$1 billion-or-so margin call that exchange officials feared it couldn't meet. Rather than let it fail, which would probably have taken down several of the smaller LME brokers that had serviced Tsingshan, LME decided to cancel all that day's trading, more than 9,000 trades worth about $4 billion. It. Canceled. The. Trades. .... it has happened before: Arch-speculator Jay Gould, dubbed the "most hated man in America," bribed Senator William "Boss" Tweed and corrupt New York judges in 1869 to delay settlement of his gold dealings and so avoid losses after his efforts to collapsed Tsingshan sold 200,000 ton March 2023 contracts at price of $20 per kilo. The Initial Margin was $20,000 per contract.(see Article 2). On March 8,2022 price of Nickel went suddenly up $100 per kilogram . Q. 3.1 What is the margin call to Tsingshan ? Will there be any damage to Tsingshan's booking broker if Tsingshan cannot pay the margin call Q. 3.2( A made-up story- see more in Article 2) Data: XYZ shorts 200,000 Ton of Nickel on March 1 at $20,000 per ton Below are Nickel prices for 2/22; and 3/1/223/9/22 r 10 Calculate the margin calls on every day between March 2 through March 7 and sum them up. By end of March 8 trading a new margin call arrives(How much?) and XYZ cannot meet it- its position is liquidated at $100,000 per ton and company is destroyed, although it would be viable if it could survive till March 9. How can it be? Q. 3.3 (this question is optional) Use data from Q. 3.2 to explain the situation Tsingshan was involved in. Why "LME brokers that had serviced Tsingshan, LME decided to cancel all that day's trading, more than 9,000 trades worth about $4 billion. It. Canceled. The. Trades" (quote from Article 2) WSJ March 8, 2022 By Jing Yang_Chinese Nickel Giant Tsingshan Faces \$8 Billion Trading Loss as Ukraine War Upends Market Chinese nickel titan Tsingshan Holding Group faces billions of dollars in trading losses, people familiar with the company said, after Russia's war in Ukraine set off an unprecedented rise in the price of a key metal used in stainless steel and electric-vehicle batteries. The paper loss stood at $8 billion on Monday, before violent moves in nickel prices led the London Metal Exchange to suspend trading in the metal on Tuesday, one of the people said. Late Tuesday, the exchange said it anticipates trading won't resume before Friday. Tsingshan's founder, Xiang Guangda, told a Chinese media outlet that "there have been some moves by foreigners," and that it is in active negotiations with relevant parties, without specifying who they were and what was being negotiated. Some of Tsingshan's creditor banks in China have become concerned about the effect of the company's trading losses on its balance sheet, according to the people familiar with the company. Tsingshan... had a $19 billion in revenue last year. For years, Tsingshan routinely sold nickel using forward contracts as part of its regular hedging, according to the people familiar with the company. Nickel prices usually move a couple of percent a day. They surged 66% Monday (March 8 ) and then on Tuesday, the price briefly doubled. They rushed to close out losing positions by buying back nickel contracts. [BUT]... Hardly anyone would sell to them, the traders said, so the purchases led to a huge rise in prices in a self-reinforcing dynamic known as a short squeeze. The crescendo arrived early Tuesday, when the price of nickel on the London Metal Exchange hit a record high of over $100,000 a metric ton before pulling back somewhat. March 9, 2022 Bloomberg reports another headache for Tsingshan as it attempts to exit its position is the fact that the company's output does not match the grade of nickel used in settlement on the LME, the contracts aren't a perfect hedge. Tsingshan has been behind some of the metal's biggest swings in recent years, March 9, 2022, 10:23 AM Bloomberg Shanghai Nickel Drops by Daily Limit as Some Trading Resumes (Bloomberg) -- Some Shanghai Futures Exchange nickel contracts dropped by the daily limit as trading partially resumed on the Chinese bourse, in a sign that an extreme short squeeze that's driven global prices sharply higher may be starting to ease. Five contracts for delivery between March and February next year all slumped as the bourse's evening session got underway, with four falling by the daily limit. About half of the exchange's contracts remained suspended following limit-up gains. Tsingshan Holding Group Co, the Chinese nickel company at the center of the historic short squeeze has secured a package of loans from local and international banks to help it meet a wave of margin calls, Bloomberg reported earlier. The problems started on Tuesday morning, when traders on the London Metal Exchange smelled blood and nickel prices almost doubled. China's Tsingshan Holding faced a \$1 billion-or-so margin call that exchange officials feared it couldn't meet. Rather than let it fail, which would probably have taken down several of the smaller LME brokers that had serviced Tsingshan, LME decided to cancel all that day's trading, more than 9,000 trades worth about $4 billion. It. Canceled. The. Trades. .... it has happened before: Arch-speculator Jay Gould, dubbed the "most hated man in America," bribed Senator William "Boss" Tweed and corrupt New York judges in 1869 to delay settlement of his gold dealings and so avoid losses after his efforts to collapsed